Profits across some of the United Kingdom’s most prominent charity retail chains have plummeted, triggering concerns that the traditional fundraising model is under significant strain.
Data from unpublished accounts indicates that Oxfam’s retail profits dropped by 23% to £4.9m in the most recent financial year, down from £6.4m previously.
This financial downturn has forced the British Heart Foundation, the nation’s largest charity retailer, to initiate plans for the closure of 150 shops after recording a £3.3m loss last year.
Similar consolidation measures are impacting other organizations, including Cancer Research UK and Scope.
This contraction in physical retail performance comes despite a broader surge in the secondhand clothing market, with UK consumer spending on pre-owned items quadrupling over the past decade to reach £8.8bn annually. Analysts point to the rise of digital marketplaces like Vinted and Depop as a primary factor, enabling individuals to sell directly to one another rather than donating goods to charities. Furthermore, competition has intensified as international firms increase the export of secondhand apparel to developing nations, particularly in Africa, disrupting traditional supply chains. Suggesting that people who might previously have donated clothes to charity shops are instead selling them directly to other consumers and profiting themselves, the shift has come alongside the rise of websites such as Vinted and Depop. The rapid change in fortunes for charity shops also highlights their limitations in the face of greater competition. “Quality is the big change marker – it’s gone through the floor. It might be having a little bit of an effect – where people have one bag for charity shop donations and one for Vinted – but we believe these effects are significantly mitigated by two things.
Lorna Fallon, who leads Oxfam’s retail operations, described the current environment as painful for the sector. Recent filings reveal a stark decline in efficiency: for every £100 spent in an Oxfam store, only £6 now supports the charity’s poverty-alleviation efforts, compared to £22 in 2022. Despite this, the organization maintains its commitment to a physical presence, focusing on books and music sales. Just £6 now goes towards the charity’s work on alleviating global poverty, oxfam’s latest filings reveal that for every £100 people spend in its shops. The figure was £22, the FT reports, as recently as 2022.
The British Heart Foundation, which employs nearly 3,700 staff, has cited an exceptionally challenging trading environment. Following a 2025 profit decline to £3.6m from £18.8m the previous year, the charity intends to close 90 stores by March 2027, with an additional 60 to follow the next year. Operating these storefronts remains costly, as charities must manage high street rents, warehouse logistics, and the labor-intensive processes of sorting and pricing items. In June, BHF carried out a major review of its retail arm, which employs almost 3,700 staff, after profits from its shops plunged from £18.8m in 2024 to £3.6m in the year to 31 March 2025.
Compounding these issues is a noted decrease in the quality of donated clothing. Author Tansy Hoskins, writing on the charity retail sector, notes that shops are struggling with an influx of substandard garments as donors treat retail sites as dumping grounds. Robin Osterley, CEO of the Charity Retail Association, acknowledged that fast fashion has undeniably eroded the quality of donations, though he argued that online platforms are not solely to blame for the sector’s woes. You’re just fighting against the waste,” Hoskins said. But he added: “We don’t see Vinted or any of the other online platforms as an issue at all.
Osterley suggested that broader economic factors, particularly the November 2024 budget, have inflicted more damage on physical shops than digital competitors. He cited increased national insurance contributions and a lowered threshold for part-time staff as major contributors to rising operational costs. However, he noted that online platforms also foster a culture of secondhand shopping that benefits the wider market, and some resellers even source inventory from charity shops. In which national insurance increases and the lowering of the national insurance threshold – affecting, osterley instead suggested the November 2024 budget had had a much larger impact on bricks and mortar charity shops.
Oxfam GB CEO Richard Hawkes emphasized that while the cost-of-living crisis has undoubtedly hit charity retail, the future still holds potential. He noted that beyond direct income, these shops provide a vital community presence and engagement opportunities for over 20,000 volunteers. The sector is now exploring ways to adapt its traditional model to better align with changing consumer habits. While providing opportunities to engage with more than 20,000 volunteers, they give us a presence in communities where we might not otherwise be.
